You're listening to episode 11 on network effects and tech bio, which is the final episode from the network effects master class Pete on the InFX podcast. Biology is the most advanced technology on Earth. And in this episode, general partner, Amar Omri, explains how network effects are helping tech bio companies, secure diseases, fight climate change, and tackles some of the biggest issues facing humanity today.
If you enjoyed the audio version of the NFX Masterclass on network effects, be sure to share with other founders and friends and watch the videos for full experience at nfx.com/masterclass. Hello. My name is Umree. I'm a general partner at NFX. My background is very scientific. I'm one of the initial scientist founders. I did my PhD in Beller Aviv University studying hard callback chemistry.
I got the 4 by 4 by fellowship went to Stanford for my postdoc, I started a company called Genum Compalo that NFX invested in 1 of the initial tech bio companies, ran it for five and a half years until we got acquired by Twist sci Sciences, a platform company creating synthetic DNA.
I was ahead of corporate development for Twist for two and a half years until the the IPO ed. Then I left to start a small fund called tech bio, a $10,000,000 Pete seed fund, and then an effect that invested my company, invested my fund, We did Mamu's Bala census together when I was a twist. Invite me to join them initially as a venture partner for fund 2, but now a general partner for fund 3. At InnFX Bio, we like to say biology is the most advanced technology on earth.
Sometimes it reminds me like a alien spaceship that crash landed on earth we're trying to figure out how this Gizmo work. It's pretty amazing technology. But there is one technology that is even more advanced in biology, and it's very human. It's entrepreneurship. Because entrepreneurs can imagine the world that it should be, and then I'll just annoyed that the world today is not as a world that they imagine and just using their passion and the grit.
They can reap a whole new universe and drag all of us kicking and screaming to the new universe. They imagine. And they're going and trying to solve some of the biggest problems that we have. So our companies are trying to cure diseases are trying to solve climate change. Trying to produce renewable chemicals and materials. So our civilization will not be dependent on fossil fuels, but will be more sustainable.
So That gives you just extra motivation and just joy of, finding supporting, just helping companies grow in this space. For the past hours, you've been hearing a lot about network effects. So let's take network effects into bio. Attend effects, we love to support Sandy's founders. And Mammoth is a great example for a company where all three founders were scientists they are obviously brilliant, right? But one way we can help them is to level up their thinking around business and defensibility.
All our platform companies are you know, they have the vertical platform, but they also have the products. So we have the platform and the products Beller on top of the of the platform. So Mammoth platform technology is based on novel CRISPR system that you can use to detect any DNA RNA sequence. And other system that they discover a small cost system that you can use to kill any genetic disease.
The great thing about the company is they have unlimited amount of indication and products they can create using that platform so they can partner some of those indications or they can develop some of those indications. And the more product they create, the more data they have, the easier it is to create new partnership with our pharma companies, and the bigger the ecosystem becomes. So I I met Trevor, at Stanford when I was still working at Twist Biosciences.
And I got really excited about what he was trying to achieve. So I introduced him to my partners at NFX, and he and his cofoundals who are one of the initial Beller group. Then later on, when the paper came out of the Jennifer DondesLab where they used CRISPR for diagnostic, the ability to detect any DNA or RNA sequence, I got extremely excited and I told Trevor, hey, this is a better IP. This is a better technology to solve the problem you are trying to solve.
And he was lucky enough to be able to get the IP out of uh-uh Jennifer's lab. And later on, 2 of Jennifer's style students, Lucas and Janice discovered Morgan system and wanted to start a company. So we brought all of them together and started Mammoth Biosciences to tackle not just a diagnostic part, but also the therapeutic side. Unlike software where it's very easy to copy Facebook, but it's it's very hard to copy 5,000,000,000 users. In biology, it starts with basic science research and IP.
You need to own the IP, the freedom to operate in the area you're trying to develop. That's how you start. Once you have that, the more products you develop, the more data you have, the easier it is for you to develop new products. You already learned about the platform network effect small toward the middle of the map, which make it stronger than others. So we Beller the founders to realize the power of network effects and how they naturally fit in.
So in Mammoth's case, they are developing their own diagnostic and their own drugs, but they also, as a platform, collaborating with many different companies to help them build on top of the platforms, either diagnostic all therapeutics. And again, because the platform is so wide and you can create so many different therapeutics and so many different diagnostic, one company cannot do it all. That's a power of the platform and especially Mao's platform. Right?
You can collaborate and get a lot of upfront revenues from collaborating with companies for specific products. And then he can use this revenue and all the platform and all the robotics and people and capabilities that you are building in house to develop your own products and go all the way to the market. Traditionally in bio, a lot of the traditional pharma plays are finding 1 small molecule that can go after one indication. And it's very binary. It's either work or it doesn't work.
You just flip a card to see if it works or doesn't work. The transition from biotech to tech bio, where, again, Beller is getting digitized, where because it's digital, you can use machinery automation to make sense of the data and moving from, you know, people pipetting the in the lab to high throughput automation, allow you to speed the cycle of design build test learn and create products faster.
It means that one company with a platform technology like Moderna and the RNA, technology or Mammoth and the, crisper technology can create huge amount of products by themselves and collaborate with many other companies to create many different products for them. And traditionally, you couldn't do that. A unique bio defensibility is regulation. Regulation is used to be looked like as a bad Like, you have to cross regulation. You have to wait a long time until you get to market.
But if you cross that barrier, then other companies would like to build on top of your technologies because it's already approved. Less risk. It's already been tested. Right? Because if you went through and jump all the hurdles to get FDA approvals, then why would anybody else use anything other than your platform? It's already approved, regulated, tried, and tested so the risk are way lower.
As investor, you very quickly realize that you know, the outcomes of companies are not a nice distribution where some companies are doing well and some are doing not that great and most are in the middle. But it's a very sharp power law where most of your companies will not Pete the capital invested, and a few of the companies will be massive successes.
So the entire game around VC is to Flint those companies, find the hits, find the special unique companies that will return the fund and create massive impact. So how do you Flint these unique companies? Well, we ask 3 questions. We ask, can it be big enough? 2nd, you have to have defensible magic, really unique technology that nobody can copy that can solve this big problem.
And third, you have to be the right people to execute on this amazing IP in this huge market to be successful because that's what we are looking Morgan lot of people that come from tech asked me, you know, can I be part of this new revolution, what we call tech bio or technology and biology? And I tell them yes because 80% of studying a company is the same no matter what the company is, sales, marketing, support, etcetera.
And then if you come from tech and you're going to tech bio, then the 10% of tech, you already know. And then you just need the 10% bio founder or by a co founder to support you. So I definitely encourage, tech entrepreneurs to come into this space. So we would like to encourage you to use the world's most advanced technologies, entrepreneurship, and biology to solve the world's biggest challenges and we will be there to support you.
You can also watch this entire master class online atnfx.com slash master class, where you can log in, track your progress, and watch full videos, retranscripts, and find other related material. Thanks for to the NFX podcast.